Brief

California PUC staff: Non-utility suppliers could serve 85% of load by mid-2020s

Dive Brief:

  • A new report from the California Public Utilities Commission and the California Energy Commission predicts the "unprecedented change" taking place on the state's electric grid could leave traditional utilities supplying retail electric service to a scant few customers by middle of the next decade.
  • Rooftop solar, community choice aggregation (CCA) and direct access providers (ESP) will make up about 25% of retail load this year, a number that could reach up to 85% by the mid-2020s, according to the report. Authors credit the changes to the interplay of aggressive environmental and clean energy goals with the state's deregulated electricity market. 
  • The paper, written by CPUC staff, was released in advance of a hearing the agency, along with the CEC, has scheduled for Friday to discuss the impacts of customer choice. 

Dive Insight:

More Californians than ever are installing distributed energy resources and moving to alternative retail providers, and the staff of the CPUC says the entire process needs more oversight and planning. 

The state is heading toward a competitive market for consumer electric services, but staff's white paper warns it doing so "without a coherent plan to deal with all the associated challenges that competition poses, ranging from renewable procurement rules to reliability requirements and consumer protection."

As more customers leave the state's three investor-owned utilities, the state will need to tackle questions of how to develop utility infrastructure and recover the costs.

The growth of community choice aggregation has been a major contributor to change. The report estimates more than 900,000 customers take service from a CCA, a trend which has been accelerating since Marin Clean Energy formed the state's first CCA in 2010. That program now serves more than a quarter million customers.

"This number is set to grow significantly in the coming years as cities and counties with populations in excess of 15,000,000 people consider launching CCAs," the white paper concluded. 

The state's CCAs have a projected 2017 load of over 13,750 GWh. One sign of the program's growth is the expected completion of the Los Angeles Community Choice Energy (LACCE) program this year, a CCA that could eventually serve more than a million customers.

The rapid growth of CCAs, distributed generation and other choice options "fundamentally challenges the incumbent regulated utility business model," PUC staff wrote.

"As sales by the regulated IOUs shifts to customers who provide for some of their own needs but still rely on the grid for various services, or to third party providers (like CCAs) of retail service, some portion of the many costs other than electricity itself may shift to the ratepayers who remain fully bundled customers of the IOUs."

The  CPUC and CEC will hold an all-day en banc hearing in Sacramento this Friday, resulting in a report that will summarize insights and comments on key retail choice questions.

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Filed Under: Solar & Renewables